Bitcoin (BTC) has been caught in the throes of immense volatility over the past several days and weeks, with the cryptocurrency recently dropping to lows of $6,500 before posting a sharp bounce to $7,400.
The momentum sparked by BTC’s bounce at $6,500 appears to be faltering, however, which could signal that it will soon drop below the lower boundary of the bullish macro trading range that it has been caught over the past several months. If this happens, it could open the gates for significantly further downside.
Bitcoin Revisits $7,000 Support Level as Bulls Lose Strength
At the time of writing, Bitcoin is trading down just under 1% at its current price of $7,100, which marks a notable retrace from its recent highs of nearly $7,500 that were set in the hours following BTC’s visit to lows of $6,500.
The bullish momentum that was incurred when Bitcoin tapped $6,500 signals that this price level is a massive support region for the cryptocurrency, but as BTC is currently nearing its next key support level at $7,000, bears may once again push the crypto down to this price in the near-term.
While looking towards the resistance levels, one analyst is noting that it is imperative that Bitcoin breaks above $8,000 in order for a bullish market structure to be confirmed.
Teddy, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, noting that there are only two ways BTC forms a bullish structure in the near-term.
“#BITCOIN | $BTC: Perfect close on the support of pattern, followed by a bounce. There are only two clear breaks that will confirm a bullish continuation, noise aside: BREAK OF RED LINE: – Key level for bull structure. BREAK OF DOTTED LINE: – Key support flipped resistance,” he explained while pointing to the chart seen below.
Perfect close on the support of pattern, followed by a bounce
There are only two clear breaks that will confirm a bullish continuation, noise aside:
BREAK OF RED LINE:
– Key level for bull structure
BREAK OF DOTTED LINE:
– Key support flipped resistance pic.twitter.com/zrgIY5XRZZ
BTC Nears Lower Boundary of Bullish Macro Trading Range
Josh Olszewicz, another popular cryptocurrency analyst on Twitter, explained in a recent tweet that Bitcoin is currently trading at the bottom of a large ascending channel that has been formed over several months, and that a break below this level could spark a large sell-off.
“$BTC: all i want for christmas is this PF to hold,” he explained while pointing to the chart seen below.
all i want for christmas is this PF to hold pic.twitter.com/vpLXifpSET
— Josh Olszewicz (@CarpeNoctom) November 26, 2019
The next few hours and days may shine a light on where Bitcoin will trend as 2019 comes to a close, as any further downside could spark capitulation that sends the crypto reeling back down towards its yearly lows.
Featured image from Shutterstock.